Nordstrom finds a new financial partner

Seattle-based major fashion retailer Nordstrom Inc. has sold its credit card portfolio with 2.2 billion dollars in receivables to Toronto-Dominion Bank. The latter will acquire the retailer’s US Visa and private label consumer credit card portfolio.

To date, the financial terms of the deal have not been disclosed, although the TD Bank has explained it will be funding the deal from its existing resources.

The agreement, expected to be completed in the second half of 2015, is pending regulatory approvals.

In addition to the acquisition of credit card portfolio, both companies have entered into a long-term agreement, under which TD Bank will become an exclusive U.S. issuer of Nordstrom-brand Visa and private-label credit cards.

“For Nordstrom, the deal is expected to improve its capital efficiency. At present, the retailer is assessing the plans regarding the usage of sale proceeds. In the latter half of the year, the firm is anticipated to announce a further update on the deal as well as its financial implications,” highlights Zacks Equity Research.

In this vein, Blake Nordstrom, co-president of Nordstrom, said “…We found TD to be a strong cultural fit, sharing our customer-focused approach and providing capabilities to help us further enhance the customer experience".

Currently, Nordstrom holds a Zacks Rank #4 (Sell).